Why Is ‘Vega’ Particularly Important When Trading Options on Volatile Crypto Assets?

Vega is the Greek that measures the sensitivity of an option's price to a 1% change in the underlying asset's implied volatility (IV). Since cryptocurrencies are known for their extreme price swings and high volatility, Vega is highly important.

A high Vega means the option's price will increase significantly if the market's expectation of future volatility rises. Traders use Vega to speculate on or hedge against changes in market sentiment regarding future price turbulence.